Canada Orders Chinese Firms To Divest, Quit Its Critical Minerals Sector

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Following a national review, the Canadian government has ordered three Chinese companies to sell their stakes in businesses involved in critical mineral production in Canada.

The three Chinese companies that were ordered to divest their interests, has interests in companies involved in lithium mining, both in Canada and abroad, including in Chile and Argentina.

Global News reported yesterday that the order, which came from innovation minister, Francois-Philippe Champagne, aims at limiting foreign company participation in Canada’s resource sector, especially in the critical mineral segment.

“While Canada continues to welcome foreign direct investment, we will act decisively when investments threaten our national security and our critical minerals supply chains, both at home and abroad,” the report quoted Champagne in a statement.

Global News said China has emerged as a major thorn in the side of the U.S. and Canada with respect to their transition ambitions, which include turning the two countries into major sources of critical minerals such as lithium, cobalt, and copper.

But while both the U.S. and Canada have spent decades trying to shrink their industries as they transformed from industrial to post-industrial economies, China is said to have has been expanding its critical mineral supply chain in shores outside China.
Today, China is recorded as the biggest processor of rare earths in the world, for instance, and also the biggest lithium processor.

As a of China’s undisputable dominance in the critical minerals sector, the U.S. and Canada are also discussing the idea of so-called friend-shoring: sourcing critical minerals and metals from friendly jurisdictions only, which would naturally exclude China.

The report say even if the friend-shoring idea gets the backing of more resource-rich nations, China’s processing capacity remains quite a challenge. 

“Even if the U.S. and Canada find a way to source their minerals either at home or from friendly countries, processing might to take place in China for the observable future,” said the report

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